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I borrowed money off a friend once. It wasn’t an astronomical amount, just £600, but it cost me a lot more in the end.
I’ve always had a distrust of credit cards. I saw taking credit as a legitimate first step towards stealing cars and ending up in drug-fuelled spiral of despair on the outskirts of Milton Keynes. Which is why, when my friend offered to lend me cash I could ‘pay back when I could,’ I agreed. We were good friends and she didn’t want interest repayments. She wasn’t going to knock down my door and repossess what little possessions I had. And what’s £600 between friends, right?
I was broke because I’d had a standard mid-twenties crisis, given up a good job in London and moved to a small place in the middle of Australia where I worked at a bar for eight months. They pay good wages in Oz, but you also pay an awful lot for food, booze and books. The upshot is, when I’d had enough and the pull of home was stronger than my fear of going back, my friend came out to visit. The plan was to tour Australia together for a month before we both went home. We’d spend the money on hostels and pale ale. When I got back, I’d get a job. I’d get my career back on track and pay her back, right away. I promised.
She wasn’t going to knock down my door and repossess what little possessions I had.
But stuff went wrong pretty quickly. The holiday wasn’t quite what I’d imagined. We argued in a bar drunk one night. I’d ordered a steak, and since she was paying, she thought it was too expensive. ‘But I’m paying you back, this has all been agreed.’ I tried to reason with her, feeling suddenly like I was owned. It was not a feeling I’d recommend. To me, the deal was simple, but to her, it meant she was able to critique the way I decided to spend the money she’d loaned me.
I saw myself the way she saw me – broke and a bit pathetic.
After that, the holiday deteriorated. We argued like a jealous couple. I felt like she had me in her back pocket, and I saw myself the way she saw me – broke and a bit pathetic. When we got back home, things got far worse, but knowing I owed her that £600 was an added impetus to get myself a job as soon as possible. As it happens, I got one within two weeks of getting back on home soil. I still couldn’t pay her back right away though, because I’d had to stump up a deposit for my new flat, and wait to get paid. By the time I was able to pay her in full, three months had passed since the loan and by then, the friendship was over. It meant nothing that the agreement had been for me to ‘pay when I could’ – because the terms had changed between us.
A bank won’t sit across from you in a restaurant and ask if you really want the steak.
Later, when I spoke openly about it, my parents were incredulous that I hadn’t asked for help or got a credit card. I’d wanted to sort it on my own and I believed ‘we were adults.’ But the fact of the matter is, I was naive and that has nothing to do with being an adult. I can’t blame her for that either, the fault was all mine. I’m ashamed to say that at 25 too, I hadn’t understood how credit cards work. The terms, though they are in small print, have been drawn up in black and white. Each party knows where they stand. Also, a bank won’t sit across from you in a restaurant and ask if you really want the steak. Once the money’s borrowed, you can do what you like with it – as long as you pay it back.
I’ve since realised there are tons of credit cards out there with 0% interest for the first year or sometimes more, and that, as long as you are careful, can be used smartly and effectively. I’ve since had several credit cards and paid them off within the year, this article by Money Saving Expert lists some of the best deals out there. They’re perfect for when the boiler breaks, or for a shock appointment with your dentist. But most importantly, a credit card isn’t a friend.
Have you had a bad experience lending or borrowing money from a mate or a family member? Or, equally, have you had a good experience? Share it with us in the comments below.